The American Economic Association has featured a research paper by Dr Christian Siegel in their ‘Chart of the Week‘. The paper entitled ‘Job Polarization and Structural Change’ (with Zsófia Bárány, Sciences Po) was also published in the January 2018 issue of the American Economic Journal: Macroeconomics. You can read the full article here.

Abstract

We document that job polarization—contrary to the consensus—has started as early as the 1950s in the United States: middle-wage workers have been losing both in terms of employment and average wage growth compared to low- and high-wage workers. Given that polarization is a long-run phenomenon and closely linked to the shift from manufacturing to services, we propose a structural change driven explanation, where we explicitly model the sectoral choice of workers. Our simple model does remarkably well not only in matching the evolution of sectoral employment, but also of relative wages over the past 50 years.